BarCap and Del Monte to settle lawsuit for $90m

Barclays Capital, the investment banking arm of Barclays, and Del Monte have
agreed to pay $90m (£58m) to settle a lawsuit over alleged conflicts of
interest related to the bank's involvement in the sale of the US food maker.

Del Monte agreed to contribute $65.7m to the settlement while Barclays will pay $23.7mPhoto: Reuters

7:50PM BST 06 Oct 2011

The cash settlement is one of the largest on record in the Delaware Chancery Court and will be paid to a group of Del Monte shareholders who had challenged the company's 2010 sale to US private equity firm Kohlberg Kravis & Roberts (KKR).

Del Monte agreed to contribute $65.7m to the settlement while Barclays will pay $23.7m, according to a statement following the agreement.

The lawsuit rested on the alleged conflict of interest that was created by Barclays Capital's role as the advisor to Del Monte on its sale as well as its position as the provider of financing to KKR to fund the deal. The practice of being both advisor and lender to potential buyers on deals was common in the private equity boom years in the run-up to the financial crisis.

The settlement between Barclays, Del Monte and the shareholders will be bring to an end all litigation over the company's sale, though it is still subject to final court approval.